Debt free almost....how to stay this way

dazzaofdagenham

Good evening
for the 1st time in almost 8 years I think I am almost debt free.

How / what do people do to stay that way...
I have several credit cards with zero balance that are just waiting for me to spend on them..
should I cut them up...to stop me
what if I need funds for a emergency etc.

Hoping for some good vibes coming back 

sharpe106

Build a emergency fund up. If you can't put the credit card in the drawer and leave it until you need it then cut them up. 

newlywed

my theory (just become debt free after many years) is never to have a credit card again. Cards were cut up long ago. 

Recently managed to clock up an overdraft (as the dmp finished) which I have just paid off so I know that I still can’t be trusted with credit

currently using ynab to build up a months worth of money as a reserve

MovingForwards

I have savings pots for everything eg
-- emergency fund to pay mortgage etc if I lose my job,
-- interior repairs pot,
--communal repairs pot, 
-- furniture replacement etc pot,
-- garden pot,
-- car repairs and all insurances pot,
-- home update (new kitchen / bathroom) pot,
-- cash / S&S for retirement.
Plus a few others.

If something costs me money, I have a pot for it. I use my credit card to build good credit history; I have 2x CC, 1 with my own bank, the other is my now dormant sub-prime and I have a spreadsheet showing monthly outgoings and another to track all my pots. Over Christmas I work out what my outgoings are for the next 12 months and if they go up I tweak the figures and reduce the savings. 

Before buying it's a long think as to whether I need it and how many hours I have to work to pay for it. I don't do frivolous spending eg daily coffees, breakfast, lunches from the shop (pre-Covid of course).

My savings goals keep me focused and I never want to be in the position I was before.

ZaSa1418

Once my credit cards are at zero I will cancel all but one. 
Some people put theirs in water and freeze them.

TheAble

Yes, you should cut them up. Use debit cards only from now on. It's a bit like if you'd finally kicked your addiction to cigarettes - would you then still keep a few packets in the house? No! :-)

Newstart3

From someone who paid off the debt (£20K+) then got themselves back in £6k debt a year or two later.... I would get rid of the credit cards and start saving.  

Singlespeeder

Well done on getting DF!
Definitely have an Emergency Fund. I rent so any large 'home owner' bills aren't mine, new roof , new central heating , rewire etc. My largest 'bill' would be a new washing machine or something to do with the car. So I've got to a point where I have £1000 in a pot in a Starling account as an EF.  Along side this I have calculated all my 'Annual' costs, car insurance/tax/mot/breakdown  and what I'm prepared to spend on Birthdays and Christmas etc .... mine came to around £1500 ... so I divide that by 12 and pay that into another Starling pot. I actually rounded up to £150 pcm (£1800 pa) so should have a £300 EF on my monthly pot too Most months it's one way traffic into the pot, then a birthday comes a long so I buy the present and refund myself from the pot. But when my BAD month , January , comes around and I have £700 to pay out on the car (which would have ALWAYS gone on the CC) I have the money to pay it all in one go, not spread over the year, thus saving more money. 
I have a CC but haven't used it in over a year and would only use it to buy the washing machine if it broke down then immediately pay off in full from the EF.
They're my two biggest budgeting tools.
I also work out my budget mid month, what I'm spending on what, and calculate what I can afford to put towards debt clearance. And stick to it. 

RyanHello

The best way to stay debt free is to stop using credit cards. 
There's not one positive thing about credit cards. 
If you want something save for it.
I used to have huge debts! Now I live within my means, top up my savings each month and invest the rest in my business and stocks and shares ISA. 

RobM99

RyanHello said:

The best way to stay debt free is to stop using credit cards. 
There's not one positive thing about credit cards.

...in your opinion. Nothing wrong with credit cards if used properly - plus there's the Section 75.

MEM62

dazzaofdagenham said:

for the 1st time in almost 8 years I think I am almost debt free.

Well done!  

dazzaofdagenham said:

How / what do people do to stay that way...

That's simple, don't borrow money. 

dazzaofdagenham said:

I have several credit cards with zero balance that are just waiting for me to spend on them..

Good.  That is what they are for  :-:smile:

dazzaofdagenham said:

should I cut them up...to stop me

No.  Exercise self-control instead.  Use that cards regularly and pay them off in full each month.  If you cut them up you will have no access to the benefits they offer when you need them.  

dazzaofdagenham said:

what if I need funds for a emergency etc.

That is what an emergency fund is for.   Save something each month to build yourself a financial buffer so that, if you have an unexpected event (interruption to your income, washing machine packs up, car needs repairs etc) you are not panicking and have the funds to cover it.  In my case I keep an equivalent of six months living expenses but you judge yours for yourself.